Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2017)
25 slides from Jp Morgan Chase &'s investor day presentation, Feb 28, 2017
Slide 1: Corporate & Investment Bank
CORPORATE & INVESTMENT BANK Daniel Pinto, Chief Executive Officer Corporate & Investment Bank February 28, 2017
Slide 2: Agenda
Agenda Page Financial performance 1 2016 Business updates 5 Financial targets 19 CORPORATE & INVESTMENT BANK
Slide 3: Summary update from previously committed priorities
Summary update from previously committed priorities What we said in 2016… Progress so far… Financial targets: $19B expenses by 2017, $19B expenses in 2016, benefitting from lower legal 1 expense and FX tailwinds 13% medium-term target ROE Record earnings of $10.9B1 with 16% ROE in FY16 2 Transfo
Slide 4: In 2016, we delivered strong results
In 2016, we delivered strong results Net revenues and income1,2 ($B) Adjusted ROE1,2 (%) 18% 17% 13% 14% 16% Capital ($B) $47.5 $56.5 $61 $62 $64 $35.0 $34.2 $33.2 Adjusted $33.0 $32.7 revenue1,2,3 Normalized revenue5 Normalized net income5 $10.1 $10.9 Adjusted $8.8 $8.6 $9.2 Net income1,2,4 FY12 FY
Slide 5: Consistent discipline driving overall expenses down while enabling reinvestment
Consistent discipline driving overall expenses down while enabling reinvestment for growth and controls Adjusted expense ($B)1 Key drivers for 2014–2016 Front office compensation 2 Operating expenses 2 Progress in line with prior commitments… …and incremental changes Control Regulatory 3 Simplificat
Slide 6: ROE walk forward
ROE walk forward CIB normalized ROE walk – FY2015 to FY2016 0.7% 16% 1.6% 0.2% (0.5%) 14.0% Legal expense 1.8% +200 bps Revenue growth - 40 bps Run-off portfolio 12.2% FINANCIAL PERFORMANCE 2015 Revenue Rates Expenses Higher capital 2016 requirement 4
Slide 7: Agenda
Agenda Page Financial performance 1 2016 Business updates 5 Financial targets 19 CORPORATE & INVESTMENT BANK
Slide 8: Treasury Services
Treasury Services Continuing to invest in our TS franchise to capture a greater share of the global cash management wallet Make it easy to do business with TS Automate and digitize account opening Improving the client Transparent and fully customizable view of client relationship for service a
Slide 9: Custody & Fund Services
Custody & Fund Services Delivering on value proposition by leveraging the power of the CIB and transforming our client offering through technology investment Highest client satisfaction in recent years Improving Commitment to providing clients access to high quality staff in their own time zones
Slide 10: Global Investment Banking
Global Investment Banking Significant progress in M&A and ECM while preserving historically strong position in DCM M&A industry wallet ($B) and JPM share (%) trend ECM industry wallet ($B) and JPM share (%) trend1 8.6% JPM 8.4% 7.5% 8.0% addressable 9.3% 8.7% 6.4% share 7.8% 7.7% 8.1% JPM 8.4% share
Slide 11: Our client-centric Markets franchise is scalable and well positioned
Markets Our client-centric Markets franchise is scalable and well positioned to capture future opportunities Our position and performance allow us to invest for the future 1 2 3 4 Invest for Core strategy Operating principles Strong profitability the future Operational efficiency Scale Client
Slide 12: Captured significant market share while industry revenue pool declined
Markets 1 Core strategy We have captured significant market share across products while overall industry revenue pool declined Global revenue pool ($B) and market share (%) 12.0% 10.2% 10.3% 9.2% 9.9% 9.3% 8.6% Market share $157 $148 Total $127 $126 industry $116 $114 FICC pool $107 2010 2011 2012 2
Slide 13: Improved leadership positions in Markets, but room for growth
Markets 1 Core strategy We improved our leadership positions in Markets in the last 5 years, but there is still room for growth Top 3 positions across 31 categories Number of JPM leadership positons Total wallet by JPM leadership position Top 3 Non Top 3 Top 3 Non Top 3 100% 100% 100% 100% 23% 21% 1
Slide 14: Equities & Prime businesses have seen significant growth in all regions
Markets 1 Core strategy Our Equities & Prime businesses have seen significant growth in all regions following our focused investment strategy Prime Brokerage revenue Cash Equities revenue Cash Synthetics Low Touch High Touch +22% (4%) +48% (13%) +12% +31% 2014 2016 2014 2016 Industry Industry pool $
Slide 15: Markets business is client-focused and flow-driven
Markets 2 Operating principles Our Markets business is client-focused and flow-driven with strong financing and client solutions businesses Strong growth of flow Financing-related Consistent, diversified performance market-making businesses revenue growth reflects from client solutions businesses op
Slide 16: Increased revenue while optimizing cost base and capital
Markets 2 Operating principles We have increased revenue while diligently optimizing our cost base and capital Markets revenues ($B) Markets expense Markets net income +20% +0% +43% $20.9 $17.5 2014 2016 2014 2016 2014 2016 Markets GSIB optimization Standardized Markets RWA Advanced Markets RWA Drop
Slide 17: Strong profitability: return on equity of Fixed Income Markets
Markets 3 Strong profitability 2016 was very strong: you will recall this slide from last year Return on equity of Fixed Income Markets 2016 BUSINESS UPDATES We had some businesses with lower fully-loaded ROE With strong marginal contribution and operating leverage, our businesses were well posi
Slide 18: Scale drives high ROE and operating leverage
Markets 3 Strong profitability Scale drives high ROE and operating leverage; as a result, 2016 revenue outperformance was highly accretive NOT TO SCALE Fully-loaded ROE for Markets businesses, 2015 and 2016 2016 Revenue vs. 2015 2015 15% Equities and Prime 2016 15% 15% Fixed Income Overall 18% Rates
Slide 19: Creating an end-to-end digital experience for clients
Markets 4 4 Invest for the future We are creating an end-to-end digital experience for clients to simplify their engagement with us and enable them to embrace market change Focus on client experience Engage clients digitally across the entire trade lifecycle Complete product suite to support pre
Slide 20: Headwinds and tailwinds: market structure evolution
Markets 5 Headwinds and tailwinds Potential further headwinds from market structure evolution remain uncertain, but seem manageable Electronic trading is growing fast, … and market structure continues to … however, the additional impact is but from a low base1… evolve… manageable Markets Flow revenu
Slide 21: Strong macro tailwinds along with FICC revenue pool stabilization
Markets 5 Headwinds and tailwinds Strong macro tailwinds along with FICC revenue pool stabilization Cyclical momentum – FICC industry revenue pool ($B)1 Increased FX volatility in 20162 Cyclical Product elimination Margin compression USD:GBP VOL USD:EUR VOL $157 (32%) 30 25 +6% $114 $107 20 15 10 5
Slide 22: Agenda
Agenda Page Financial performance 1 2016 Business updates 5 Financial targets 19 CORPORATE & INVESTMENT BANK
Slide 23: ROE walk-forward
ROE walk-forward CIB normalized ROE walk – FY2016 to Medium-term target 0.8% 0.3% (0.3%) (0.6%) 16% (0.2%) (2%+/-) 14%+/- ~100 bps increase from 2015 Investor Day target 2015 Medium-term Investor Day target Revenue ~$34B ~$36B Expense ~$19B Overhead ratio 55-60% 55%+/- Capital 12.5% CET1 $70B in 201
Slide 24: Looking forward
Looking forward Continue deepening relationships as part of our commitment to a client-centric franchise Maintain leading positions and avoid complacency Embrace change and adapt business model to disruptive forces Emphasize innovation and technology investment to improve client experience a
Slide 25: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks an